QUESTION1 Money is any commodity or token that is O issued by the government. a

Question

QUESTION1 Money is any commodity or token that is O issued by the government. a store of value. O generally accepted as a means of measurement. O generally accepted as a means of payment QUESTION 2 The functions of money are O medium of exchange, the ability to buy goods and services, and checking accounts store of value, use as a barter mechanism, and unit of account medium of exchange, unit of account, and store of value. medium of exchange, the ability to buy goods and services, and the ability to pay off debts O QUESTION 3 What is a problem with barter that makes it so difficult to use? Barter requires a double coincidence of wants. Barter omits the store of value role for money Individuals have to produce something to trade with. Barter is very efficient but illegal because it avoids taxation QUESTION 4 Commodity money has little to no value independent of its use as money can be used to purchase commod ties, but not services. has value independent of its use as money is backed by a valuable commodity such as gold

Explanation / Answer

Question 1

When a commodity or token or anything else is used as a medium of exchange or is generally accepted as a means of payment then in that case such commodity or token is referred to as money.

So,

Money is any commodity or token that is generally accepted as a means of payment.

Hence, the correct answer is the option (4).

Question 2

Money performs followinf functions -

1. It acts as medium of exchange.

2. It acts as store of value.

3. It acts as unit of account.

4. It acts as measure of deferred payments.

Hence, the correct answer is the option (3).

Question 3

Barter system refers to an exchange system in which goods are exchanged for goods.

However, such exchange of goods for goods require double coincidence of want which means that if you want a good that other person have then in that case other person must want the good that you have otherwise no transaction can happen.

This condition of double coincidence of want as needed in barter system makes the barter system difficult to use.

Hence, the correct answer is the option (1).

Question 4

Commodity money refers to the money that is made from the physical commmodity or that is backed by a valuable commodity such as gold.

Hence, the correct answer is the option (4).

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